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ECONOMIC NEWSLETTER

EMBASSY OF

THE KINGDOM OF THE NETHERLANDS

IN KINSHASA

ECONOMIC NEWSLETTER OF THE EMBASSY OF THE KINGDOM OF THE NETHERLANDS IN KINSHASA & BRAZZAVILLE Design by MEDIALAB CONSULT

Nr 29 / Août-Sept 2015

MASOLOKingdom of the Netherlands

Nr 61 / April 2018* Masolo (word in Lingala) means “short news”

Connecting business to the African market !

From the Netherlands

PAGE 4 • African banking market in between profitability and growth• Congolese economy revives growth• Oil company Eni injects 30 million dollars in a renewable energy project • Signing of agreement on the free trade area in Africa

Congo-Brazzaville & Africa

PAGE 2 • First EU Expert Group on responsible sourcing of tin, tantalum, tungsten and gold• Waste product in Rotterdam could be worth millions• Philips to change company name while keeping brand• Royal Bank of Scotland is considering Amsterdam as post-Brexit European HQ

PAGE 3 • Samsung negotiating a multi-year agreement on cobalt in the DRC• After an interruption of 34 years, the railway connection Angola – DRC is restored• Congo grants Total extension to oil-exploration permit at Ugandan border• Seven main mining companies leave the FEC • The level of foreign reserve assets passes the bar of a billion dollars

DRC Headlines


• Congo’s New Mining Law • Practical information & Contact

PAGE 5

The Dutch Embassy in Kinshasa is pleased to inform of its official support and participation in the DRC Mining Week to be held in Lubumbashi, DRC from 14 to 15 June 2018. The event is the largest mining and industrial platform in the DRC, bringing together over 3300 international professionals and local stakeholders from more than 50 countries, to explore the vast investment opportunities.

The demand for durable minerals will grow exponentially and the Netherlands, with its experience in Corporate Social Re-sponsibility (CSR), would like to contribute to an environment in DRC where minerals are produced in a sustainable matter. The aim is to link the different global CSR initiatives (Voluntary Principles on Security & Human rights; Responsible Mining Index; European Partnership for Responsible Minerals; Extractive Industries Transparency Initiative) to the recent develop-ments of the mining sector in the DRC.

The 3-day program includes: exclusive power sessions, a 2-day conference for international and local stakeholders, a CEO roundtable, a B2B exhibition, technical workshops, technology displays, demonstration opportunities and an exclusive site visit. The Embassy of the Kingdom of Netherlands would like to invite you to join us and attend the event. To find out more about this event, visit www.drcminingweek.com.

Post Scriptum

Join the DRC Mining Week in Lubumbashi!


2 F r o m t h e N e t h e r l a n d s

The Royal Bank of Scotland (RBS) is considering in mov-ing its post-Brexit European headquarters to Amster-dam’s Zuidas financial district. RBS said the Zuidas was the preferred location for its European headquarters. RBS decided to pull out of most of its European operations after the 2008 financial crisis.

This left only the former Zuidas office and a subsidiary, NatWest Markets, in the city centre of Amsterdam. RBS needs a post-Brexit European base in order to continue offering its financial services in continental Europe. How-ever, the bank is not making a definite move to Amster-dam until more details are known about the terms of Brexit.

RBS will be one of the few banks in London opting to settle its European headquarters in Amsterdam. British bankers shy away from the Dutch capital because of the 20% of annual pay bonus cap which is in sharp contrast to the 100% cap prevailing in the rest of Europe. (Source: Dutchnews.nl)

Bleached earth appears to be worth millions of euros as a waste product. The product can be reused as biofuel or as construction material. With the use of the product one can also massively cut back on the level of fossil fuel needed. A new consortium is investing millions of euros for a new extraction installation in Rotterdam to make the extraction of bleached earth possible.

The recovery of saturated bleaching earth is unique in Europe. The process is fairly new. There are currently three facilities active around the world, all in Asia. Dutch research and development in this area can help to make the installation more sustainable.

Cargill, IOI Loders Croklaan and Olenex agreed to finalize the case and to re-cruit a specialized partner for the construction and operation of the installa-tion. The municipality of Rotterdam and the Port of Rotterdam are supportive of this new initiative. (Source: RVO. Photo: Shivam Minerals)

On 9 March 2018, the first EU Expert Group on responsible sourcing of tin, tantalum, tungsten and gold (3TG) took place to support the implementa-tion of the Conflict Minerals Regulation.

The regulation obliges EU firms to extract tin, tantalum, tungsten, and gold from responsible sources and to ensure that their supply chains do not con-tribute to financing armed conflict. These due diligence rules take effect on 1 January 2021, but importers are encouraged to apply them as soon as pos-sible.

The expert group will be used by CIE to regularly adjust the content of the regulation that will be needed before the date in which the law will go into effect. It is planned for the group to meet approximately 4 times a year during the implementation phase of the regulation. (Source: Ministry of For-eign Affairs of The Netherlands. Photo: The Guardian)

Philips Lighting, the world leader in lighting has announced its intention to change its name from Philips Lighting to Signify. The motivation for the company to change its name arises out of their strategic visions, as explained by Philip Lighting’s CEO Eric Rondolat: “Our new company name is a clear expression of our strategic vision and a fabulous opportunity to introduce a new corporate look and feel that is uniquely our own and will serve to further unite our 32,000 employees.”

The company will continue to use the Philips brand, under the existing licensing agreement with Royal Philips. The new com-pany name satisfies the company’s contractual requirements under the Company Name License Agreement with Royal Philips.

In view of the renaming of the company, a proposal to amend the articles of association of Philips Lighting N.V. will be sub-mitted to the Annual General Meeting of Shareholders to be held on May 15. (Source: Newsroom.com. Photo: Lux Review)

First EU Expert Group on responsible sourcing of tin, tantalum, tungsten and gold

Royal Bank of Scotland is considering Amsterdam as post-Brexit European HQ

Waste product in Rotterdam could be worth millions

Philips to change company name while keeping brand

3 D R C H e a d l i n e s

For 34 years, miners were obliged to pass through the ports of Durban in South Africa and Dar es Salaam in Tanzania to sell Congolese raw materials, which costed a lot in terms of transport and resulted in that certain mining companies had to stop their activities.

”In the era of the great Gécamines [a Congolese mining company con-trolled by the state], we had 450,000 tons of copper. Today, we have already achieved 1.2 million tons. If today we have a shortcut through (the port of ) Lobito, I believe we will be able to make savings that could easily exceed a billion dollars“, Al Kitengie, economic strategist and analyst, has indicated. (Source : RFI)

Samsung C & T approached Somika Ltd. to buy cobalt produced in its mine in Kisanfu, in the DRC, after having bought copper from the same company over the course of the last four years. The amount has not been specified and Samsung still has to perform tests on the shipping costs.

Last February, Apple, one of the biggest users of this indispensable mineral for the batteries of its devices, also started discussions for the supply of co-balt in the DRC. The mineral costs 82,000 dollars per ton. Its price was multi-plied by 2.7 in two years’ time.

Cobalt is a key ingredient for smartphone batteries and electric cars. The batteries of electric cars are more voluminous and this agreement would al-low to produce lighter and more resistant batteries. (Source : Politico. Photo: Adiac-congo.com )

The seven heavy weights of the mining sector in the Dem-ocratic Republic of Congo (DRC) are of the opinion that the Companies Federation of Congo (FEC) does not sufficiently defend their interests and have thus decided to leave the FEC.

This announcement through a statement and with immedi-ate effect arrived while the DRC had just adopted a new min-ing law which is much less advantageous for companies op-erating in the sector. These seven companies produce 85% of the copper, cobalt and gold in the DRC.

By leaving the FEC, the mining companies are trying to send a message: the need, according to them, to renegoti-ate certain aspects of the new law. The text indeed foresees an increase of the royalties from 2% to 3.5% on traditional minerals and up to 10% on strategic minerals such as cobalt. (Source: RFI)

Samsung negotiating a multi-year agreement on cobalt in the Democratic Republic of Congo

The level of international reserve assets has passed from 845 million USD at the end of January 2016 to 1.016 billion USD today. ”The efforts made to the management level of public finances to increase foreign exchange earnings, no-tably the measure authorizing mining and oil companies to pay taxes, rights and levies due to the state in foreign currencies and to assure the quality of the spending in for-eign currencies, have allowed a significant reconstitution of their level. This now reaches 1.016 billion dollars, the equivalent to a bit over 4.25 weeks of imports of goods and services”, Henri Yay Mulang has indicated.

The government intends to consolidate the surpass of this symbolic bar of a billion dollars of foreign reserve assets. In any case, the Minister of Finance has acknowledged, there is still a long way to go to achieve the recommended aver-age which amounts to three months of imports. (Source: Zoom Eco. Photo: Economico.cd)

The Democratic Republic of Congo granted Total SA a one-year extension of its license to explore for oil along the Ugandan border. Total SA must meet certain objectives, including developing a drilling program before the new permit expires Jan. 26, 2019, Oil Minister Aime Ngoy Mukena said. Congo currently produces about 22,500 barrels per day from aging oil blocks on the Atlantic Ocean coast.

In February, Congo President Joseph Kabila approved a production-sharing contract between the state and Compagnie Miniere Congolaise SPRL, or Comico, for three oil blocks in the country’s Cu-vette Centrale region. Sections of the permits encroach on the Salonga National Park, a UNESCO World Heritage site and the world’s second-largest rainforest. Scientists recently discovered the world’s largest tropical peatlands in the Cuvette Centrale and say billions of tons of carbon dioxide could be released if they are destroyed. (Source: Bloomberg. Photo: AllAfrica.com)

Seven main mining companies leave the FEC

Congo grants Total extension to oil-exploration permit at Ugandan border

The level of foreign reserve assets passes the bar of a billion dollars

After an interruption of 34 years, the railway connection Angola – DRC is restored

4 C o n g o - B r a z z a v i l l e & A f r i c a

The African leaders who were present in Kigali for the summit of the African Union, have signed an agree-ment on 21 March to establish a continental free trade area. ”This day is historical. After Addis Abeba in 1963, Abuja in 1991 and Durban in 2002, Kigali marks a new phase of our path towards more integration,“ Moussa Faki, president of the Commission of the Af-rican Union, stated. ”More than forty countries have accepted to sign the agreement“, he continued.

Three texts have been signed; one on the free trade area, secondly, the protocol on free movement of per-sons on the continent and lastly, the ”Declaration of Kigali“, a solemn declaration at the end of the summit. The project could be around 2,500 billion USD of the combined GDP. For the Democratic Republic of Con-go, it was Léonard She Okitundu Lundula, Vice-Prime Minister and Minister of Foreign Affairs and Regional Integration, who signed the agreement in name of Joseph Kabila. (Source: Radio Okapi. Photo: Quartz)

According to the Congolese Minister of Planning, Statistics and Regional Inte-gration, Ingrid Olga Ebouka Babakas, Congo will realize an economic growth of approximately 4% this year, against less than 2% in 2017. This revival can be ex-plained by the reforms put in place by the government and the increase of oil production.

According to experts, the country shows a decline of the overall budgetary defi-cit of its actions, excluding grants, from 402.5 billion in 2016 to 374.7 billion in 2017, taking into account the budgetary adjustment made by the state. There is also an improvement of the current account deficit which dropped from 66.1% to 5.5% of the GDP of the country.

The national monetary and financial committee has announced that the inflation rate in Congo could grow a bit with 1.3% of the annual average, however remain-ing well below the norm imposed by the states of the Central African Economic and Monetary Community (CEMAC), which is 3%. (Source and photo: Africatime)

With 300 million Africans who have bank accounts, the African banking market is second in terms of profitability and growth in the global plan, according to the last report of the McKinsey cabinet. The number of Africans having a bank account grew from 170 million in 2012 to almost 300 million in 2017.

They would have to be 450 million in five years from now. The revenues of the sector on the continental scale would have to grow from 86 billion dollars in 2017 to 129 billion in 2022, according to them. ”We expect the revenues to grow 8.5% a year, over the coming five years.“

On a global scale, the banking sector is confronted with disappointing returns and a flat growth. However, ”the African banking sector offers a refreshing con-trast. Its markets are in rapid growth and almost double as profitable as the glob-al average.“ (Source: Le Point Afrique. Photo: ID4D)

The president of Congo, Dénis Sassou Nguesso, has proceeded with the launch of works for the ”Center of Excellence of Oyo“ project mid-March, a project on renewable energy estimated to cost around 30 million dollars. Entirely financed by oil company Eni through a framework agreement with the government, the proj-ect intends to promote research in renewable energy.

Aimé Coussoud Mavoungou, Minister of Scientific Research and Technological innovation, stated that Congo and Eni ”mark as such their common desire to reinforce their roles as actors of development fostering research on renewable energy, access to energy and opportunities for the private sector in the energy sec-tor.” (Source: Financial Afrik)

African banking market in between profitability and growth

Signing of agreement on the free trade area in Africa

Congolese economy revives growth

Oil company Eni injects 30 million dollars in a re-newable energy project

POST SCRIPTUM


P R A C T I C A LI N F O R M A T I O N

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Embassy in Kinshasa 133, Boulevard du 30 juin (croisement de l’avenue des Jacarandas & Blvd 30 juin) | Gombe, Kinshasa

Phone: +243 99 6050 600Emergencies: +243 99 818 62 24Fax: +243 99 6050 629E-mail: [email protected]

Postal addressLokatie 309 / ZMA Kinshasa Postbus 12200 - 2500 DD Den Haag

Opening hoursMonday - Thursday 08:00 – 16:30 Friday 08:00 – 13:30

Opening hours consular department Monday & Wednesday 09:00 -12:00 Otherwise by appointment only

---------------------------------------------------------------

Consulate in BrazzavilleAddress30, Blvd Denis Sassou N’Guessou B.P 277 M’Pila - Brazzaville

Opening hoursMonday - Friday 09:00-16:00 (Consulate)Tuesday & Thursday 09:00-12:00 (Consular affairs)

Honorary Consul Ms. Hilly-Anne FumeyPhone: +242 06 924 14 07E-mail: [email protected]


For comments, suggestions and remarks on this Newsletter, or any others business, please contact the Embassy’s eco-nomic policy officer:

Phone: +243 99 060 50 627E-mail: [email protected]

You have received this Newsletter because you have had previous contact with the Embassy of the Kingdom of the Netherlands in Kinshasa, DRC. Please send an email to [email protected] with “remove from mail list“ in the subject line if you no longer wish to receive this newsletter.

The content of this newsletter does not reflect the views of the Embassy of the Netherlands in Kinshasa. It is merely a resume of news articles, from both national and interna-tional newspapers and news agencies.

Credit photos: internet----------------------------------- Join our network at & Mr Robert Schuddeboom (Ambassador) @rschuddeboom

Mrs Corina van der Laan (Head Ec./Dev. Aff) @CorinaMushika

Ms Hilly-Anne Fumey (Honorary consul)

Mr Francis Wilanga (Sr Economic policy officer) @FrancisWilanga

Ms Sandy Makola (Economic policy officer) @Sandytalo

Mr Karel van Dam (Intern)

Congo’s New Mining Law

(Photo: Actualité.cd)

The Congolese parliament has adopted a new mining code which allows the government to increase their tax rate on mining firms and increase government royalties from the industry. Certain elements of the new mining code will require implementing legislation and may be the subject of subsequent negotiations with mining companies, as expressed by the Minister of Mines.

What are the motivations for this new code?

• Several mining multinationals in the DRC generate a low tax revenue, despite the fact that many receive very high income levels.

• The prices of minerals of which the DRC is rich of such as copper, cobalt, diamondsand gold have substantially increased in the years 2016 and 2017, creating great potential for additional state income.

What are the new regulations exactly?

• The questioning of the fiscal stability clause, which previously allowed 10-year fiscal and customs stability for mining companies.

• Congolese state participation in mining projects will increase from 5% to 10%.• The mining royalty goes from 2% of turnover to 3.5% for precious metals.• The possibility of defining metals as “strategic” allowing an increase of the percent-

age of the mining royalty to up to 10%. This could be the case for cobalt.• The introduction of a tax on super profits and a tax on capital gains, even if they are

made abroad, and some taxes on the environment.• Regarding the social responsibility of mining companies, they will now have to

reserve 0.3% of their turnover to an external social fund.

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